¶ … Nikes Income Sheet
The latest Nike 10-K covers the period ending 31st May 2016 (Nike, 2016). Looking specifically at the consolidated income statement, this is very short, and although there is a subcategory for gross profit. Nike, 2016). This is the two step format, as there is a breakdown of the categories, operating income is separated from non-operating income and there is a subcategory for gross profit, these indicate the two step process (PWC, 2016). However, in the consolidated income statement, the information is very limited. Looking though the accounts, the notes do provide more detail, such as Item 7 which provides details on sources of income and in come by type of sales, more details of lease and capital costs, while note 8 provides a more detailed breakdown of long-term debt (Nike, 2016),.
The income statement is meant to provide an accurate representation of the financial position of the company, this will inherently require a degree of estimation. In the income presented, there are estimates which impact on the revenues recognized. Therefore, the estimates also reflect the revenue recognition policies of Nike, which the firm states are based on actual sales made, adjusted for changes...
Inventory Nike addresses futures ordering on page 64 of its FY 2016 Form 10-K. The futures ordering program "allows retailers to order five to six months in advance of delivery" at a fixed price. This program allows Nike to gain some advance knowledge of future demand, assisting the company to schedule its production accordingly with expected future demand. The company notes, however, that this program does not prevent excess or short
This strategy of customization increases sales and profits per pair of shoes produced. Successful Acquisitions and Partnerships Nike acquired Official Starter Properties and Official Starter in later 2004. These two entities were the sole owners and licensors of the Starter, Team Starter and Asphalt brand names as well as master licensee of the Shaq and Dunkman brands (a line of athletic apparel, footwear and accessory products for the value retail channel).
Nike: Financial Analysis The relevance of analyzing the financial stability and health of an entity cannot be overstated especially when it comes to the determination of the future performance of the concerned entity. This text undertakes an in-depth financial analysis of Nike, a well-known footwear, equipment, and apparel designer. In seeking to conduct an in-depth analysis of Nike, I will amongst other things describe the company and its operations in significant detail,
Nike Financial Analysis Nike earned a net income of 2.133 billion in fiscal 2011 on revenues of $20.862 billion. A trend analysis of the income statement shows that net income grew 9.7% in FY 2011, whereas the net income grew by 11.8%. In the previous year (FY2010), Nike's revenue actually declined by 0.8%, while the net income increased by 28.2%. The performance over the past two years indicates that Nike has faced
5% of total liabilities. Their retained earnings, on the other hand, total $5.073 billion. The heavy use of retained earnings is partially explained by their view of themselves as a growth company. While they pay a dividend, Nike prefers to re-invest much of its profits back into expansion. They do not feel that the market has matured sufficiently to stop their aggressive growth strategy. Another consideration in their capital structure
Nike's Strategic And Financial Position Analysis Nike is a globally recognized multinational corporation founded by the Stanford Graduate School of Business graduate, Phil Knight, and Bill Bowerman who was the track and field coach at the University of Oregon. The two appear to be a natural fit as each hailed from a background that would appreciate the underlying design that goes into creating a quality running shoe. Nike's global operations in aggregate
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